Speaker
Description
Informal, low-quality employment in micro, small, and medium enterprises (MSMEs) remains a significant challenge in low- and middle-income countries. We present evidence from a consulting program in Côte d'Ivoire that advised firms on business management practices to show that a low-cost intervention can help improve job formality, without imposing undue financial burdens on firms. Using a randomized controlled trial with 448 MSMEs, we find that the intervention led to considerably higher overall employment formalization, driven in particular by greater reported minimum wage compliance and an increase in written contract provision. Drawing on a unique matched employer-employee dataset collected at three time points, we show suggestive evidence that these improvements were not driven by worker turnover or selection effects, but rather by employers' increased recognition of formalization's benefits. The intervention's financial implications were moderate, with evidence suggesting firms partially formalized previously informal payment streams, without a significant increase in total labor costs.
| Keyword | Impact Evaluation |
|---|
